working paper 363 emerging trends in india-pakistan trade · table 7: comparison between informal...

1

Working Paper 363

Emerging Trends in

India-Pakistan Trade

Nisha Taneja

Samridhi Bimal

Varsha Sivaram

August 2018

INDIAN COUNCIL FOR RESEARCH ON INTERNATIONAL ECONOMIC RELATIONS

Table of Contents

Acknowledgements ................................................................................................................... i

Abstract ..................................................................................................................................... ii

1. Introduction ........................................................................................................................ 1

2. Trade Trends and Composition ........................................................................................ 3

3. Trade through Different Modes of Transport................................................................. 7

4. New Commodities Traded in Post- liberalization Period ............................................... 8

4.1 New Exports ................................................................................................................ 9

4.2 New Exports through Different Modes of Transport .................................................. 9

4.3 New Exports and Informal Trade ............................................................................. 10

5. Measures Affecting India’s Exports to Pakistan........................................................... 12

5.1 Cotton Yarn and Cotton Fabric (HS Codes: 5205-5212) ......................................... 12

5.2 Cotton not Carded or Combed (HS Code: 5201) ..................................................... 13

5.3 Soya bean (HS Code: 2304)...................................................................................... 14

6. Impact of GST on India’s Imports from Pakistan ........................................................ 15

7. Conclusion and Policy Recommendations ..................................................................... 18

References ............................................................................................................................... 20

APPENDIX ............................................................................................................................. 22

List of Tables

Table 1: India's Trade with Pakistan (US$ million) ............................................................ 4

Table 2: India’s Top 10 Exports to Pakistan at HS-2 (All Values in US$ Million) ........... 5

Table 3: India’s Top 10 Imports from Pakistan at HS-2 (All Values in US$ Million) ....... 6

Table 4: Product Composition of India’s Trade with Pakistan (in %) ................................ 6

Table 5: India’s Exports to Pakistan in New Commodities ................................................ 9

Table 6: India’s Top New Exports to Pakistan (2016-17) .................................................. 9

Table 7: Comparison between Informal Export Commodities and New Export

Commodities ....................................................................................................... 11

Table 8: Value of Import of Cotton by Pakistan from India and the World (US$ million) ... 12

Table 9: Shares of modes of India’s Exports of Cotton yarn and fabric to Pakistan ........ 13

Table 10: Value of Import of Cotton by Pakistan from India and the World (US$ million) ... 13

Table 11: Shares of modes of India’s Exports of Cotton to Pakistan ................................. 14

Table 12: Value of Import of Soya bean by Pakistan from India and the World (US$

million) ................................................................................................................ 14

Table 13: Shares of modes of India’s Exports of Soya bean to Pakistan ............................ 14

Table 14: Pre-GST and Post-GST Duty Rates for India’s Top Ten Imports from Pakistan

in 2016-17 ........................................................................................................... 17

List of Figures

Figure 1: Impact of Political Relations between India and Pakistan on Trade .................... 3

Figure 2: India’s Trade with Pakistan (US$ billion) ............................................................ 4

Figure 3: Mode-wise Export and Import Share of India-Pakistan Trade ............................. 8

Figure 4: Mode-wise India’s Total Trade with Pakistan-Old Commodities v/s New

Commodities ....................................................................................................... 10

i

Acknowledgements

This study on “Emerging Trends in India-Pakistan Trade” would not have been

completed without the support of many. First and foremost the support from United States

Institute of Peace (USIP) is gratefully acknowledged. The interactions held with several

stakeholders during field visits to Amritsar and Mumbai provided in-depth understanding of

issues pertaining to the subject and formed the basis of the paper. The preliminary findings of

the study were presented during a conference in Kathmandu held on November 17,

2017 jointly organized with Sustainable Development Policy Institute (SDPI), Islamabad -our

research partner in Pakistan. The feedback and comments received by participants during the

conference were extremely useful and helped finalize the study. We would like to express our

gratitude to the GST council for sharing their views on our analysis of imposition of GST on

imports from Pakistan. We would also like to thank Ms. Manali Sharma and Ms. Riya Roy

for their research assistance in the study. We are indebted to our reviewers for their valuable

comments, which enhanced the quality of the paper.

The administrative team of ICRIER deserves a special mention. In particular, we would like

to thank Rajinder Singh Rawat for helping us organize the conference in Kathmandu.

ii

Abstract

Significant measures were undertaken by India and Pakistan to liberalize trade in 2012. In

particular, Pakistan’s policy to permit all items to be imported from India except for a few

items was expected to bring about a quantum increase in India’s exports. Similarly, India’s

efforts to address Non-Tariff Barriers (NTBs) were expected to lead to an increase in

Pakistan’s exports to India. This study focuses on understanding whether there has been

substantial increase in trade since 2012 and whether there has been a change in commodity

composition of traded items. It also examines whether new items have entered India’s export

basket and assesses whether these items indicate a shift from informal to formal trade. The

study identifies key trade policy reform measures undertaken by the two countries which are

likely to impact India-Pakistan trade. These measures include regulatory duties imposed by

Pakistan and Goods and Service Tax (GST) adopted by India.

The key finding of the study is that there has been a limited impact of trade liberalization on

the volume of trade between the two countries. The shift from positive list to negative list has

not resulted in any major increase in new exports. The share of new commodities exports in

total exports has showed a rise of only 9 percentage points between 2012-13 and 2016-17.

However, the trade basket has witnessed a diversification in terms of number of new items

traded. The study finds that there is evidence of items shifting from informal to formal

channels. The study also finds that the imposition of regulatory duties and compliance of

standards has not affected India’s exports to Pakistan. The study concludes by making policy

recommendations that could enhance and facilitate bilateral trade between India and Pakistan.

_________

Key Words: India-Pakistan, bilateral trade, trade normalization, informal trade

JEL Classification: F10, F13, F50, F53

Author’s email: [email protected]; [email protected];

[email protected]

__________

Disclaimer: Opinions and recommendations in the report are exclusively of the author(s) and not of

any other individual or institution including ICRIER. This report has been prepared in good faith on

the basis of information available at the date of publication. All interactions and transactions with

industry sponsors and their representatives have been transparent and conducted in an open, honest

and independent manner as enshrined in ICRIER Memorandum of Association. ICRIER does not

accept any corporate funding that comes with a mandated research area which is not in line with

ICRIER’s research agenda. The corporate funding of an ICRIER activity does not, in any way, imply

ICRIER’s endorsement of the views of the sponsoring organization or its products or policies. ICRIER

does not conduct research that is focused on any specific product or service provided by the

corporate sponsor.

1

Emerging Trends in India-Pakistan Trade

Nisha Taneja, Samridhi Bimal and Varsha Sivaram

1. Introduction

Until recently, India and Pakistan were trading under a rather restrictive bilateral trade

regime. In 1996, India accorded Most Favored Nation (MFN) status to Pakistan thereby

offering Pakistan the same trading regime as it offers to any other country in the world.

Pakistan, on the other hand, continued to allow imports of a limited number of items from

India, collectively known as the positive list; although the number of items on the list has

increased gradually. The positive list was even more restrictive for road-based trade, as

Pakistan allowed only thirteen items on the positive list to be imported from India by road.

One of the most significant developments in India-Pakistan trade has been that Pakistan made

substantial progress in the process of granting Most Favored Nation (MFN) status to India in

2012 by switching from the positive list approach which allowed trade in a limited number of

items to a small negative list of items in which trade is not permitted.1 Similarly the items

allowed to be traded by the road route were also increased.2 India, on the other hand, also

undertook several measures to address non-tariff barriers as part of the trade normalization

process. Since then no further trade liberalization has taken place. As the two countries

prepared themselves for the 2014 elections in India, neither was interested in undertaking

new measures. After the new Government came to power in 2014, several attempts were

made to resume the bilateral dialogue but these were cancelled due to increasing political

tensions between the two countries. The high-level foreign secretary level talks between India

and Pakistan scheduled for August 2014 and the National Security Advisors meet scheduled

for August 2015 were cancelled. Political tensions have remained high and the resumption of

dialogue in the near future seems unlikely.

While political relations between the two countries have most certainly influenced trade, it is

important to note that no measures having direct negative impact on trade were adopted by

the two countries unlike instances in the past when political skirmishes led to adopting

measures which restricted trade3. The key question here is whether in a somewhat benign

environment for a period of six years since the trade liberalization episode in 2012, India and

Pakistan have been able to reap its benefits. It was expected that trade liberalization would

lead to increased trade and an increase in the number of items being traded as more

commodities had been included in the permissible list for exports from India to Pakistan. It

was also expected that there would be a substantial shift of trade from informal to formal

channels. It was expected that addressing the issues related to non-tariff measures would

improve market access for Pakistan’s exports to India.

1 Negative list consists of 1209 items

2 Positive list of 137 items

3 For instance, trade by the land route was banned following the attack on Parliament in 2001.

2

Bilateral trade between India and Pakistan would of course be impacted by the domestic trade

policies adopted by the two countries. Some of these could also influence India-Pakistan

trade flows. For example, in 2015, the Government of Pakistan unilaterally imposed a 10

percent regulatory duty on all imports of cotton yarn and processed fabric in a bid to protect

its domestic industry from dumping of cheap raw material. Since cotton is one of India’s top

export items to Pakistan, the imposition of this regulatory duty has a direct impact on India’s

exports of cotton. Similarly on the Indian side, in July 2017, the Government of India

introduced the Goods Services Tax (GST). This destination based tax which replaces multiple

indirect taxes on trade in goods has implications on India’s trade with its partners, including

India’s trade with Pakistan.

To identify other current issues related to Indo-Pak trade we went through several media

reports. The reports indicated that there has been a reduction in India’s exports of cotton to

Pakistan due to non-compliance of phytosanitary requirements (Dawn 2016, Reuters 2016).

Similarly soya bean exports from India dropped to negligible levels on the ground that they

did not meet phytosanitary standards.

In the context of recent developments in the post-liberalization phase, the current study

focuses on the following key questions on India-Pakistan trade:

1. Has there been a substantial increase in trade since 2011-12? Has the structure of imports

and exports changed in terms of items traded and in terms of use-based categories?

2. Has trade through different modes of transport undergone a change in the last few years?

3. Have new commodities entered the export basket since trade liberalization? Do these

exports depend on the same mode of transport as old items? Are the new items shifting

from informal to formal channels?

4. How have regulatory duties and compliance of standards affected exports to Pakistan?

5. How has the GST impacted imports from Pakistan?

The study uses “mixed methods”, based on secondary sources and primary information

collected through field surveys. Secondary sources include published papers, data and

government policies, agreements, regulations and protocols. Secondary data on India’s trade

with Pakistan has been collected from the Directorate General of Foreign Trade (DGFT) and

Directorate General of Commercial Intelligence and Statistics (DGCIS), Ministry of

Commerce, and World Integrated Trade Systems (WITS) Database published by the World

Bank. Consultative meetings were held with importers, exporters, manufacturer, and freight

forwarders, clearing agents, and government officials at the state and center levels. Field

surveys were conducted in New Delhi, Amritsar and Mumbai in 2017.

Section 2 of our report analyses trade trends in terms of value, commodity composition and

structure in terms of use based categories. Section 3 examines trends in share of trade through

different modes of transport. Section 4 identifies new commodities which have entered the

3

export basket and the modes of transport through which such trade is taking place. It also

maps informally traded goods with new exports to assess whether a shift is taking place from

informal to formal channels. In Section 5 we identify export commodities which may have

been impacted by regulatory duties and/or faced non-tariff barriers. Section 6 examines the

implications of GST for imports from Pakistan. Section 7 suggests policy options for

enhancing bilateral trade between the two countries.

A crucial aspect which the study was unable to address was non-tariff barriers being faced by

Pakistan.

2. Trade Trends and Composition

Trade trends are examined in terms of value, trade balance, composition and structure.

(i) Trade Trends

We have made an attempt to map trade trends with major political events and trade measures.

We find that during 2011-12 to 2016-17, while no proactive trade enhancing or trade

restrictive measures were undertaken there have been several unfavourable political events.

In this period, trade has fluctuated and has increased marginally reaching a slightly higher

level in 2016-17 than was achieved in 2011-12 (Figure 1).

Figure 1: Impact of Political Relations between India and Pakistan on Trade

Source: Author’s compilation from Ministry of Commerce DGFT Export-Import Databank and

updated from Taneja et al (2013)

4

Since 2011-12, trade has been fluctuating ranging between US$ 1.94 billion and US$ 2.70

billion (Figure 1). Pre- and post-trade liberalization India has had a trade surplus with

Pakistan. The average of trade balance ratio was 67.2 percent in the pre-trade liberalization

period as compared to 62 percent in the post-trade liberalization period. Thus trade balance

ratio has improved in Pakistan’s favor in the post-liberalization period.

Figure 2: India’s Trade with Pakistan (US$ billion)

Source: Directorate General of Foreign Trade, Ministry of Commerce & Industry, Government of

India

Table 1: India's Trade with Pakistan (US$ million)

Year Exports

(X)

Imports

(M)

Trade Balance

(X-M)

Total Trade

(X+M)

Trade Balance Ratio

(X-M/X+M)*100 (%)

2006-07 1350 324 1026 1674 61

2007-08 1951 288 1663 2239 74

2008-09 1440 370 1070 1810 59

2009-10 1573 276 1297 1849 70

2010-11 2040 333 1707 2372 72

2011-12 1542 398 1144 1939 59

2012-13 2065 542 1523 2607 58

2013-14 2274 427 1847 2701 68

2014-15 1857 497 1360 2354 58

2015-16 2171 441 1730 2612 66

2016-17 1821 454 1367 2275 60

Source: Directorate General of Foreign Trade, Ministry of Commerce and Industry, Government of

India

(ii) Commodity Composition

A comparison of commodities traded between the two countries in 2011-12 and 2016-17

helps us to understand whether there has been a change in the structure of trade. In 2011-12,

India’s top 3 exports to Pakistan at the HS-2 classification of items included organic

1.67

2.24

1.81 1.85

2.37

1.94

2.61 2.70

2.35 2.61

2.27

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Total Trade (US$ billion)

5

chemicals, residues and waste from the food industries (largely soyabean), edible vegetables

and certain roots and tubers, and coffee, tea, mate and spices accounting for about 50% of

total exports to Pakistan.4 However, in 2016-17 while organic chemicals and plastic

continued to be among the top 5 top export items, cotton emerged as the highest export item

that year with a share of 26 percent of total India’s exports to Pakistan (Table 2). At a

disaggregated level, (HS-6 classification) top commodities exported from India to Pakistan in

2016-17 included cotton, para-xylene, polypropylene, woven fabrics, single yarn of combined

fibers, sugar, tomatoes, reactive dyes and preparations. Cotton alone accounted for nearly 14

percent of exports in that year (Appendix A Table 1).

Table 2: India’s Top 10 Exports to Pakistan at HS-2 (All Values in US$ Million)

HS Code Commodity Description 2011-12 2016-17

52 Cotton 87.12 477.46

29 Organic chemicals 290.2 293.37

39 Plastic and articles thereof 77.14 124

32 Tanning/dyeing extracts; tannins and their derivatives. Dyes,

pigments and other coloring matter;

87.2

7 Edible vegetables and certain roots and tubers 146.39 80.13

55 Man-made staple fibers 79.62

84 Nuclear reactors, boilers, machinery and mechanical

appliances; parts thereof

70.26

12 Oil seeds and olea. Fruits; misc. Grains, seeds and fruit;

industrial or medicinal plants; straw/fodder

48.31 55.22

17 Sugars and sugar confectionery 46.79

30 Pharmaceutical products 44.22

23 Residues and waste from the food industries; prepared animal

fodder.

197.17

9 Coffee, tea, mate and spices 103.74

40 Rubber and articles thereof 62.25

54 Man-made filaments 59.84

38 Miscellaneous chemical products 46.98


India

On the imports side, India’s top 3 imports from Pakistan in 2011-12 included edible fruit and

nuts; peel or citrus fruit or melons, cotton and salt; sulphur; earths and stone; plastering

materials, lime and cement accounting for about 50 percent of total imports (Table 3). While

these items continued to be among the top import items in 2016-17 as well, we find that there

has been an increase in imports of mineral fuels, mineral oils and product of their distillation.

At a disaggregated level (HS-6 classification), dates (fresh or dried) were the most important

item being imported from Pakistan, accounting for about 28 percent of total imports in 2016-

17. Other items imported constituted of cement, oils, cotton, gypsum, aluminum ores and

concentrates, disodium carbonate and petroleum oil (Appendix A Table 2).

4 HS refers to Harmonized System of classification

6

Table 3: India’s Top 10 Imports from Pakistan at HS-2 (All Values in US$ Million)

HS Code Commodity Description 2011-12 2016-17

8 Edible fruit and nuts; peel or citrus fruit or melons. 80.68 126.75

25 Salt; sulphur; earths and stone; plastering materials, lime and

cement.

56.28 106.22

27 Mineral fuels, mineral oils and products of their distillation;

bituminous substances; mineral waxes.

23.37 78.56

52 Cotton. 60.43 23.66

41 Raw hides and skins (other than furskins) and leather 19.93

26 Ores, slag and ash. 18.12

28 Inorganic chemicals; organic or inorganic compounds of precious

metals, of rare-earth metals, or radi. Elem. Or of isotopes.

14.51 15.42

90 Optical, photographic cinematographic measuring, checking

precision, medical or surgical inst. And apparatus parts and

accessories thereof;

8.9

63 Other made up textile articles; sets; worn clothing and worn textile

articles; rags

8.05

70 Glass and glassware. 7.76

71 Natural or cultured pearls, precious or semiprecious stones, pre.

metals, clad with pre-metal and articles thereof; imitation jewelry;

coin.

34.57

29 Organic chemicals 24.08

74 Copper and articles thereof. 14.02

39 Plastic and articles thereof. 13.38

78 Lead and articles thereof. 11.3


India

(iii) Changes in Use-based Category for Trade Items

A more insightful inference can be drawn if we classify traded items into raw materials,

intermediate goods, capital goods and consumer goods5. We find that while raw materials and

intermediate goods comprised the bulk of exports both pre- and post-liberalization, their

share increased from 78 percent in 2011-12 to 82 percent in 2016-17. Similarly, raw materials

and intermediate goods comprised the bulk of India’s imports from Pakistan however their

combined share dropped from 86 percent in 2011-12 to 72 percent in 2016-17 (Table 4).

Table 4: Product Composition of India’s Trade with Pakistan (in %)

Category Exports Imports

2011-12 2016-17 2011-12 2016-17

Raw Materials 19 25 41 41

Intermediate Goods 59 57 45 31

Consumer Goods 18 14 12 27

Capital goods 4 5 2 1

Source: UN ITC-WITS database

5 Product composition based on WTO Stage of Processing (SoP) categories

7

3. Trade through Different Modes of Transport

Sea is the dominant mode of transport for trade between India and Pakistan. In 2011-12, the

sea route accounted for 60 percent of total bilateral trade and this share increased to 69

percent in 2016-17. The second most important mode of trade is the road route (Wagah-

Attari) which has continued to account for a 17 percent share in bilateral trade, both in 2011-

12 and 2016-17. It is the rail route that has witnessed a fall in its share from 15 percent in

2011-12 to 7 percent in 2016-17. The share of air route has remained meager at about 7

percent in 2011-12 as well as 2016-17. A similar trend in terms of importance of different

modes exists for exports as well as imports. Data on mode-wise exports indicates that

between 2011-12 and 2016-17, the share of road in India’s exports to Pakistan decreased

from 16 percent to 9 percent, while that of rail decreased from 15 percent to 8 percent and of

sea increased from 63 percent to 75 percent (Figure 3). The decrease in share of exports by

road indicates that the liberalization on the road route indicated by the increase in number of

items allowed to be exported from India to Pakistan has not resulted in an increase in exports.

This can also be attributed to infrastructure and institutional bottlenecks impeding growth of

trade via the road route. The infrastructure at the port is poor with inadequate warehousing

capacity, no full body truck scanners, no lab testing facilities etc (Taneja et al 2016). In terms

of institutional mechanism supporting this trade, though there is a provision for regular

meetings to be held by a Customs Liaison Border Committee comprising of customs officials

from both sides, these are not functional. Earlier these meetings were held every 2 months to

discuss operational day-to-day issues; however consultations reveal that these meetings have

been discontinued for the past two years.

Data also suggests that exports of items that cannot be exported by the road route are being

exported at a much higher cost by sea instead of the rail route. This can be attributed to the

impediments encountered by businesses while transporting goods by rail. There is inadequacy

in the number of wagons allocated to Indian exporters. Additionally, the allocation is done

manually and is not computerized making the entire allocation system non-transparent. Only

BCX wagons are allowed as a result of which there is no provision of sending liquid cargo or

uncovered cargo. The infrastructure at the rail port is inadequate. The documentation process

is also manual. There is no Electronic Data Interchange (EDI), no Risk Management System

(RMS) and no provision for pre-arrival processing of documents. In addition, there is

absence of an institutionalized consultative mechanism between different agencies at the

border, and between the border agencies and the agencies at the centre to meet and identify

roadblocks in facilitation of trade and collaborate to address them. There is thus an urgent

need to address the impediments on the rail route, because for Indian exports this is the

cheapest mode of transport available for the items on the positive list.

Data on mode-wise imports indicates that between 2011-12 and 2016-17, the share of road in

India’s imports from Pakistan increased from 22 percent to 51 percent while that of rail

decreased from 13 percent to 2 percent and of sea decreased from 50 percent to 43 percent

(Figure 3).

8

Figure 3: Mode-wise Export and Import Share of India-Pakistan Trade

Source: DGCIS, Ministry of Commerce and Industry, Government of India

In 2016-17, the top commodities exported from India to Pakistan by road at HS-6

classification included cotton, tomatoes; by rail included reactive, pysllium, kernel, and

reactive yellow, vegetable seeds; and by sea included para-xylene, polyprylene, sugar and

cotton. In the same year, India’s major imports from Pakistan by road included dates, cement

and aluminium; by rail included hides/skins, surgical instruments, and by sea included dry

dates, petroleum oils and oils obtained from bituminous minerals, cement and cotton

(Appendix B).

4. New Commodities Traded in Post- liberalization Period

In order to examine if the trade liberalization process undertaken so far has been effective in

expanding bilateral trade, the study undertakes a secondary data exercise to understand (i)

whether the growth in bilateral trade is accounted for by old items that were on the positive

list before 2012 or by new items which have entered the permissible list in 2012?; (ii) by

which modes are these new items being traded? and (iii) whether the new items are the ones

that were previously traded informally?

New items of export are those items which have entered the trading basket in the post-trade

liberalization period. These items are in addition to the items that were on the positive list

prior to 2012. While the Ministry of Commerce, Government of Pakistan vide S.R.O No. 766

(I)/2009 has notified the positive list i.e. list of items importable from India at the 8 digit level

of HS classification, the official list has many discrepancies. Firstly, even though both

countries follow a standardized international coding system at the 6 digit level, some codes

do not match at the 8 digit level. Secondly, in some cases, descriptions of items do not match

even though the codes match. Therefore in order to identify if any new items are being

exported from India to Pakistan after the policy change in 2012, we generated a positive list

comprising of all items that were traded during 2008-09 and 2011-12. The generated positive

22%

13%

50%

15%

51%

2%

43%

4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Road Rail Sea Air

India's Imports from Pakistan

2011-12

2016-17

16% 15%

63%

6% 9% 8%

75%

8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Road Rail Sea Air

India's Exports to Pakistan

2011-12

2016-17

9

list constituted 2342 items at the 8 digit level of classification. The items in the generated

positive list were then matched to items that were traded post liberalization. New items were

identified as those items which did not appear in the traded positive list before 2011-12 and

were traded at least once in 2012-177.

4.1 New Exports

The shift from a positive list to a small negative list of 1209 items has led to a modest

increase in exports of new commodities over the five years. The share of new commodities in

total exports has shown a rise from a f mere 3 percent in 2012-13 to 12 percent in 2016-17

(Table 5). Interestingly, the trade basket has witnessed a diversification in terms of number of

new items traded. In 2016-17, 753 new items were exported accounting for a share of 32

percent in total number of items exported that year.

Table 5: India’s Exports to Pakistan in New Commodities

Year Value of New

Exports

(in US$

Million)

Share in

Value

No. of New Items Share in No. of Items

2012-13 56.02 3% 410 24%

2013-14 136.5 6% 614 33%

2014-15 205.87 12% 663 35%

2015-16 198.99 10% 770 39%

2016-17 220.7 12% 753 32%


India

In 2016-17, India’s top 5 new exports to Pakistan at the HS-2 classification of items included

organic chemicals, oil seeds, miscellaneous grains, medicinal plants, straw, nuclear reactors,

boilers, machinery and mechanical appliances and parts thereof, coffee tea, mate and spices

and cotton (Table 6).

Table 6: India’s Top New Exports to Pakistan (2016-17)

HS Code Commodity Description Value (US$

million)

Share

29 Organic Chemicals 34.9 16%

12 Oil Seeds , Misc. grains, Medicinal plants , Straw 29.81 14%

84 Nuclear reactors, boilers, machinery and mechanical

appliances and parts thereof

26.9 12%

9 Coffee, tea, mate and spices 20.71 9%

52 Cotton 14.28 6%

4.2 New Exports through Different Modes of Transport

In line with the mode-wise distribution of trade in old commodities, the maximum percentage

of new commodities (75 percent) was exported by sea (Figure 4). This was followed by rail

10

(20 percent); and air and road (3 percent each). It is important to note here that for new

commodities, the reliance on rail route is more. This could perhaps be because the road route

has a restriction on the number of items that can be exported from India to Pakistan. Only 137

items are allowed to be exported via road route. No such restriction is present on the rail

route.

This trend also reflects the importance of addressing the impediments of the land route which

is the most feasible and cost-effective way of moving goods between the two countries.

Unless the land route is improved substantially, transaction costs of trading between the two

countries will remain high which will deter trade realization.

Figure 4: Mode-wise India’s Total Trade with Pakistan-Old Commodities v/s New

Commodities


4.3 New Exports and Informal Trade

Despite trade normalization efforts, while formal trade between India and Pakistan continues

to remain low, informal trade has continued to thrive between the two countries6. A recent

study (Taneja and Bimal, 2016) estimates informal trade between India and Pakistan to be

close to US$ 4.71 billion in 2012–13, which is almost twice the value of formal trade

between the two countries in that year. Of this, it is estimated that India exported US$4

billion to Pakistan and imported US$720 million from Pakistan. A similar study conducted on

the Pakistan side by Ahmed et al (2014) estimates the informal flow of goods from India to

Pakistan to be US$ 1.79 billion.

The main items India exported informally were jewellery (24 per cent), textiles (20 per cent),

machinery and machine parts (8 per cent), electronic appliances (6 per cent), chemicals (5 per

cent), paper (5 per cent) and tyres (5 per cent). India’s informal imports from Pakistan mainly

6 Informal trade can be broadly defined as trade between two countries that should be included in the national

income statistics, according to conventional national income accounting, but is not.

3%

20%

3%

75%

8% 7% 10%

75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Air Rail Road Sea

New Commodities Old Commodities

11

consisted of textiles (49 per cent), dried fruits (32 per cent), spices (10 per cent) and carpets

(4 per cent) (Taneja and Bimal 2016).

Mapping the previously informally exported items with new items of export (Table 7), we

find that many items which were exported through formal channels in the post-liberalization

period were those that were previously exported through informal channels. While the

progress is only incremental, this does indicate a shift from informal trade to formal trade for

these commodities.

Table 7: Comparison between Informal Export Commodities and New Export

Commodities

HS Codes Commodity Description Informal Exports* New Exports

7113 Real Jewelery 910

50-63 Textiles 780 34.26

84-85 Machinery and Machine Parts 305 34.43

8509 Electronic Appliances 220

7204, 7404, 7602 Scraps 193 0.01

4801-4823 Paper 190 0.01

2901-2942 Chemicals 187 34.9

4011 Tyres 187 0.16

1904-1906, 2106 Packaged Food Items 170 0.49

910 Spices 160 0.08

713 Pulses 156 1.69

3307, 3401, 3304 Consumer Durable Items 150 0.39

3811 Industrial Additives 133 0.01

3001-3006 Pharmaceutical Products 83 0.59

7018, 7117, 3926 Jewelry (Artificial) 28 0.23

14049040 Pan Leaves/Betel Leaves 26

2905 Alcohol 22 0.89

1513 Coconut Oil 20

902 Tea 16

8212 Shaving Blades 15 0.09

0701-0814 Fruits and Vegetables 12 3.42

21069020 Pan Masala 8 0.03

2402 Tobacco Products 6 0.01

4202 Leather 5 0.01

8708 Auto Components 4

6802 Stone 3

9403 Furniture 2 0.02

8045090 Aampapad 0.5

3926 Soda bottles 0.5 0.2

3305 Herbal Products 1.6

Note: The commodities mentioned in the table were identified during ICRIER survey September

2013- March 2014. Authors have assigned HS codes corresponding to the commodities and then

mapped these with new items of export. Any inference or quantification is thus only an

approximation.

*Source: Ahmed et al 2014; Taneja and Bimal 2016. Informal value of exports estimated at 2012-13

12

5. Measures Affecting India’s Exports to Pakistan

Based on information on regulations imposed on certain products and on non-tariff barriers

being faced by Indian export products, three items were selected for analysis. An important

measure adopted by Pakistan was the imposition of a 10 percent regulatory duty on imports

of cotton yarn and grey and processed fabric. While the duty was applicable to imports from

all countries, Pakistan imported a substantial amount of cotton yarn and fabric from India.

Hence this product was selected for the analysis. In addition, soya bean and cotton were

selected as media reports indicated that India’s exports of cotton and soya bean oil could not

comply with phytosanitary requirements.

5.1 Cotton Yarn and Cotton Fabric (HS Codes: 5205-5212)

In October 2015, the Federal Board of Revenue, Government of Pakistan vide SRO

Notification (1055(I)/2015) imposed regulatory duty of 10 percent on the imports of cotton

yarn and cotton fabric affecting the HS codes from 5205 to 52127. Regulatory duties, by

definition (WTO 2015) provide additional protection for some goods during the period under

review. As per Customs Act of Pakistan (section 18(3)), regulatory duties up to 100 percent

may be imposed on specified imports in addition to tariffs and "special" duties. They are

issued in SROs by the FBR and are not included in the tariff schedule. Though regulatory

duties are being phased out in Pakistan, they are still imposed periodically under "certain

peculiar and compelling circumstances" (Trade Policy Review, WTO). As a result of the

imposition of the regulatory duty on import of cotton yarn and fabric, Pakistan’s imports of

these products from the world fell sharply from US$ 216.75 million in 2014 to US$ 113.53

million in 2015 and have stayed relatively low in 2016 as well at a value of US$ 133.84

million. In line with the world trend, imports from India have also witnessed a decline,

though the decline is marginal compared to the total imports decline from the world.

Interestingly, India’s share in Pakistan’s import of cotton yarn and fabric has steadily

increased from 46 percent in 2014-15 to 59 percent in 2015-16 to 65 percent in 2016-17

(Table 8). These figures indicate that the imposition of the regulatory duty has not

impacted India’s exports adversely.

Table 8: Value of Import of Cotton by Pakistan from India and the World (US$ million)

2014 2015 2016

Pakistan importing Cotton yarn & fabric from India 98.96 66.72 86.60

Pakistan importing Cotton yarn & fabric from World 216.75 113.53 133.84

Share of India in Pakistan’s Cotton yarn & fabric Imports 46% 59% 65%

Source: World Integrated Trade Solution, WITS database

7 Detailed list of all the product codes and their description falling under the chapter heads 5205 to 5212 is

given in Appendix C.

13

Data on mode-wise exports of cotton yarn and fabric shows that while the share of sea has

declined from 92 percent in 2014-15 to 67 percent in 2016-17, the share of road has increased

from 8 percent in 2014-15 to 33 percent in 2016-17 (Table 9).

Table 9: Shares of modes of India’s Exports of Cotton yarn and fabric to Pakistan

2014-15 2015-16 2016-17

Road 8% 13% 33%

Rail 0% 0% 0%

Sea 92% 87% 67%


5.2 Cotton not Carded or Combed (HS Code: 5201)

If we look at cotton (not carded or combed), which is the largest export item to Pakistan, we

see a different trend. While Pakistan’s imports of cotton have increased from the world, its

imports from India have declined (Table 10). Though there was no formal restriction imposed

on the imports, it has been reported that during October-November 2016, Pakistan suspended

cotton imports from India, claiming shipments to have failed to fulfill phytosanitary

requirements. However, it must be kept in mind that the declining trend in cotton started

before this measure. Therefore, this decline may not necessarily be linked to imposition of the

standard requirements.

What is essential to note here is that despite the decline and the standards imposition

measure, cotton continued to be the largest export item from India in 2016. In fact more

recent data from DGFT also indicates that cotton was the largest export item from India in

2016-17.

Table 10: Value of Import of Cotton by Pakistan from India and the World (US$

million)

2014 2015 2016

Pakistan Importing Cotton from India 282.02 273.47 209.06

Pakistan Importing Cotton from World 521.64 543.75 580.50

Share of India in Pakistan's Cotton Imports 54% 50% 36%


Mode-wise distribution of India’s exports of cotton shows that the share of road witnessed a

steep decline from 31 percent in 2014-15 to 6 percent in 2016-17 (Table 11). This can be

possibly attributed to the fact that the phytosanitary measures were imposed more stringently

at the road route. According to reports in the Pakistan media, the Department of Plant

Protection (DPP) restricted the import of cotton through the Wagah border on the ground that

consignments through the road route usually come in open trucks and there is a greater risk

that the cotton may be exposed to pests and other diseases (Reuters, 2016; Dawn, 2016).

14

Table 11: Shares of modes of India’s Exports of Cotton to Pakistan

2014 2015 2016

Road 31% 19% 6%

Rail 0% 0% 0%

Sea 69% 81% 94%


5.3 Soya bean (HS Code: 2304)

Soya bean has been one of the traditional export commodities from India to Pakistan.

However, the exports of soya bean to Pakistan in the past few years have declined

substantially to reach a negligible value in 2016. If we look at Pakistan’s imports of soya

bean from the world and compare it to its imports from India, we find that while Pakistan’s

imports of soya bean from the world have fallen significantly, India’s share has dropped from

40 percent in 2014 to almost zero in 2016 (Table 12).

Table 12: Value of Import of Soya bean by Pakistan from India and the World (US$

million)

2014 2015 2016

Pakistan importing Soya bean from India 193.65 68.70 0.35

Pakistan importing Soya bean from World 478.91 396.94 141.73

Share of India in Pakistan’s Soya bean Imports 40% 17% 0%


In terms of use of different modes of transport for exporting soya bean, there has been no

change in the last three years. Road has continued to be the predominant mode of

transportation for soya bean with almost all trade being routed through this route (Table 13).

Table 13: Shares of modes of India’s Exports of Soya bean to Pakistan

2014-15 2015-16 2016-17

Road 97% 96% 98%

Rail 0% 0% 0%

Sea 3% 4% 2%


Based on media articles and stakeholder consultations held in Amritsar, it was reported that

in February 2017 the Pakistan Standard and Quality Control Authority disallowed the entry

of dried oil cakes from India on the ground that either they are genetically modified or they

had pork pieces in them. It was also reported that the Indian custom officials tried

communicating with their counterparts and addressed the issues by conveying that the only

genetically modified crop in India is BT Cotton. With regard to the second claim, it was

conveyed that during the oil expelling process from Soya bean, no additives or extracts

15

containing any animal produce is used (ICRIER Survey 2017). As a result of this, Indian

exports of soya bean to Pakistan have been adversely impacted in the last one year.

6. Impact of GST on India’s Imports from Pakistan

The Government of India introduced the Goods and Services Tax on 1st July 2017. This was

a very significant step in the field of indirect tax reforms in India. By amalgamating a large

number of Central and State taxes into a single tax, the aim was to mitigate cascading or

double taxation effect and pave the way for a common national market.

The tax regime in India before GST was extremely complicated. The Constitution (One

Hundred and First Amendment) Act, 2016, demarcated the fiscal powers between the Centre

and the States with almost no overlap between the respective domains. The Centre had

powers to levy tax on the manufacture of goods8 while the States had powers to levy tax on

sale of goods. In case of inter-State sales, the Centre had power to levy a tax (Central Sales

Tax) but the tax was collected and retained entirely by the originating States. As for services,

it was the Centre alone that was empowered to levy service tax. Since the States were not

empowered to levy any tax on the sale or purchase of goods in the course of their importation

into or exportation from India, the Centre levied and collected this tax as additional duties of

customs, which was in addition to the Basic Customs Duty. These additional duties were

imposed in the form of Countervailing Duties (CVD) and Special Additional Duty (SAD).

The purpose of these additional duties was to counter balance excise duties, sales tax, state

VAT and other taxes levied on the domestic products. In the pre-GST regime, there was an

anomaly between taxes imposed on imported goods and those imposed on domestic

manufactured goods. The taxes imposed on imported goods were often different from taxes

imposed on domestic manufactured goods.

The introduction of GST essentially amended the constitution so as to concurrently empower

the Centre and the States to levy and collect the GST. The Constitution (122nd Amendment)

Bill was introduced in 2015 and provided for a levy of GST on supply of all goods or services

except for alcohol for human consumption. This tax is now levied as dual GST separately but

concurrently by the Union (central tax - CGST) and the States (state tax - SGST)/ Union

territories without legislatures (Union territory tax- UTGST). An Integrated GST (integrated

tax- IGST) is levied on inter-State supply (including stock transfers) of goods or services.

Import of goods is treated as inter-State supplies and subjected to IGST in addition to the

applicable customs duties. Similar to import of goods, the import of services is also now

treated as inter-State supplies and subjected to IGST. With GST, several indirect taxes were

subsumed removing the anomaly between taxes imposed on imports and taxes imposed on

domestic manufactured goods. Apart from Basic Customs Duty and Social Welfare

Surcharge9, the duty rate for domestic manufacturing and imports is now the same (i.e IGST

levied on imported goods is the same as IGST levied on domestic manufacturing).

8 Except alcoholic liquor for human consumption, opium, narcotics etc.

9 As recent as in February 2018, Education Cess and Secondary and Higher Education Cess on imported

goods was abolished and was replaced by a Social Welfare Surcharge (PIB 2018). This Surcharge is

16

While GST has an impact on imports from all countries, this section presents the change in

duty structure for top 10 items of imports from Pakistan (Table 14). The customs duties on

imports from Pakistan, applicable under the South Asian Free Trade Agreement (SAFTA)

tariff concession schedule, have remained the same in the pre- and post-GST period. As we

can see from Table 14, total duty that will be applicable on imports from Pakistan post-GST

has increased on all selected items. However, at this stage, it is difficult to analyze its impact

on actual trade. India is still in the transition stage of moving to a seamless and integrated

system of GST. The government is in the process of streamlining the GST policy and

procedures. Therefore, any impact of the policy change will be reflected only after 2-3 years

of its implementation.

imposed at the rate of 10% of the aggregate duties of customs, on imported goods and is expected to

provide for social welfare schemes of the Government of India. For certain goods exemption on the whole

of Welfare Surcharge can be claimed vide Notification No.11/2018-Customs dated 02.02.2018.

17

Table 14: Pre-GST and Post-GST Duty Rates for India’s Top Ten Imports from Pakistan in 2016-17

PRE-GST POST-GST

S.

No.

HS

Code

Commodity BCD CVD Spl. CVD/

SAD

Cess Total

Duty

BCD Additional Duty

of Customs

Social Welfare

Surcharge

IGST

Levy

Total

Duty

1 8041030 Dry dates hard 5 0 4 3 9.36 5 ~ 10 12 18.16

2 25232910 Ordinary portland cement, dry 5 12.5* 4 3 23.42 5 ~ 10 28 35.04

3 27101290 Other 5 14 4 3 25.10 5 14 10 18 49.31

4 26060090 Other aluminium ores and concentrates 5 0/12.5** 4 3

9.36/

23.42 5 ~ 10 5 10.78

5 25201010 Natural gypsum and anhydrite 5 0 4 3 9.36 5 ~ 10 5 10.78

6 52010020 Foreign cotton of all staple lengths 5 0 4 3 9.36 5 ~ 10 5 10.78

7 41079900 Other/hides/skins including sides 5 0 4 3 9.36 5 ~ 10 5 10.78

8 27101990 Other petroleum oils and oils obtained

from bituminous minerals nes10

8 14 4 3 28.76

9 28362020 Disodium carbonate light 5 12.5^ 4 3 23.41 5 ~ 10 18 24.49

10 63109040 Synthetic rags 5 0^^ 4 3 9.36 5 ~ 10 12 18.16

Source: Author’s calculations using Customs Tariff Manual, 2017-18 and Customs Duty Calculator, Central Board of Indirect Taxes and Customs

Note:

- All duties are calculated on Assessable Value (AV) INR 100.

- Total Duty (Pre-GST) = Aggregate of (i), (ii), (iii) and (iv) as per calculation details given below

(i) BCD on AV

(ii) CVD calculated on [(AV+BCD)]

(iii) Education Cess 3% [BCD+CVD] on aggregate of Customs Duty without SAD

(iv) SAD 4% of [(AV+BCD+ADC+3% of (BCD+CVD)]

-Post-GST BCD is as per SAFTA Notification 068/2012-60(I)

-Exemption on the whole of Welfare Surcharge is available vide Notification No.11/2018-Customs. However exemption is not available for the above listed commodities.

*Portland Cement under 252329 in packed form 12.5% plus Rs. 125 per tonne [Ref: S. No. 51 of 12-CE/17.03.2012 as amended by 12-CE/01.03.2015]

Portland cement under 252329 – Rs. 1000 per tonne – [Ref: Central Excise Tariff Schedule]

** Additional duty in headings 26.01 to 26.17 is NIL for Ores and 12.5% for Others [Ref: Sl. No. 56 of CE-12/17.03.2012 read with the Central Excise Tariff Schedule]

^ Additional Anti Dumping Duty on Disodium Carbonate by Ntfn 34-ADD/03.07.2012; 40-ADD/12.08.2015.

^^ CVD is 0 under Ntfn 12 17.03.2012, otherwise Not Excisable.

10

At the time of publication of this paper, GST on petroleum products was not levied.

18

7. Conclusion and Policy Recommendations

This paper examined whether there has been an increase in trade since the trade liberalization

took place between India and Pakistan in 2012. The study finds that trade has increased only

marginally post liberalization during 2012-17. In terms of mode-wise distribution of trade,

the study finds that there has been a shift from road and rail to sea for exports. For imports

the share of road has increased while the share of rail and sea has decreased. There are

infrastructure and institutional barriers that continue to inhibit the shift of exports from road

to rail which is the cheapest mode of transportation between India and Pakistan.

The shift from a positive list to a small negative list of 1209 items has led to a modest

increase in exports of new commodities over the five years. The share of new commodities in

total exports has shown a rise from a mere 3 percent in 2012-13 to 12 percent in 2016-17

(Table 5). Interestingly, the trade basket has witnessed a diversification in terms of number of

new items traded. In 2016-17, 753 new items were exported accounting for a share of 32

percent in total number of items exported that year.

In addition, the study finds that there is evidence of items shifting from informal to formal

channels. Our analysis on trade trends conducted in this paper suggests that the political

relationship between India and Pakistan and the weak institutional structure has inhibited the

two countries from realizing the benefits of trade liberalization.

The study also finds that the imposition of regulatory duties and compliance of standards has

not affected India’s exports of cotton yarn and fabric to Pakistan. The study also briefly

analyzed the change in duty structure under recently imposed Goods Services Tax (GST) for

top imports from Pakistan. Although it is still very early to analyze its impact on actual trade,

the GST rates show that total duty that will be applicable on imports from Pakistan post-GST

has increased on all items compared to pre-GST rates.

As a way forward, it is important for the two governments to complete the unfinished India-

Pakistan trade normalisation agenda. The trade normalization process, when completed, is

likely to unleash the untapped trade potential between the two countries. Taneja et al (2014)

estimated bilateral trade potential between the two countries to be US$ 19.8 billion.

However, in the interim period it is important to undertake certain steps that can facilitate the

ongoing trade process.

This study proposes the following key measures that can enhance and facilitate trade between

India and Pakistan.

1. There is a need to bridge the information asymmetries which increases the cost of trading

between the two countries. Trade related rules, regulations and procedures must be made

publically available. Government bodies should ensure that any revisions or changes in

policy reach traders in a timely manner. A dedicated web portal should be designed for

India-Pakistan trade, tracking the latest developments in trade policy. The governments

19

should also establish a point of enquiry to address questions on trade related matters by

traders, businessmen and other interested parties.

2. Since only a few new items have entered the export basket, it is important to have forums

that would bring buyers and sellers together. Holding exhibitions and fairs showcasing

the products of the other country can enable a better understanding of the market demand,

rules and regulations, and can enable increased acceptability among consumers for

products made in the other country.

3. A large proportion of bilateral trade between India and Pakistan in recent years has

shifted to the sea and road from the rail route. It is important to address the impediments

on the rail route so that it is used for trading. Rail is the cheapest mode of transporting

goods.

4. Non-tariff barriers between India and Pakistan continue to persist despite several

agreements and policies enacted on this front. The Bureau of Indian Standards and

Pakistan Standards and Quality Control Authority have signed a Mutual Recognition

Agreement in order to overcome technical barriers to trade, however lack of testing

facilities, especially at ports, continues to create hassles and delays especially in case of

food products. Both countries can therefore address the concerns related to the imposition

of non-tariff barriers by improving infrastructure for testing facilities and simplifying

trading procedures.

5. While it may be difficult to implement new steps to facilitate trade it must be ensured that

existing institutions in place for facilitating trade should continue their operations. For

example, the Customs Liaison Border Committee formalized to resolve the operational

issues at Wagah-Attari should be resumed for the road route. A similar institutional

mechanism should be put in place for the rail route. Regular consultations should be held

between customs officials of the two countries as they can resolve trade and operational

related issued at the Wagah-Attari border.

India and Pakistan need to view the consultative meeting process not just at the bilateral level

but also as a mandate under the WTO’s Trade Facilitation Agreement (TFA), of which both

India and Pakistan are signatories. The TFA has a provision for consultative mechanism in

Article 2 Para 2 whereby Members have to provide for consultations between its border

agencies and traders/ stakeholders within its territory. Meeting the requirements of these

provisions will automatically ensure that there are consultations between border agencies and

traders, and also between border agencies of the two countries. Also the provisions require

countries to hold such consultations at regular intervals. These measures would make the

consultative process more sustainable.

20

References

Ahmed, V. et al (2014). Informal Flow of Merchandise from India: The Case of Pakistan.

Working Paper 141, Sustainable Development Policy Institute, Pakistan.

Economic Times (2016). Pakistan Suspends Import of Cotton, Agri Commodities from India

Available at https://economictimes.indiatimes.com/news/defence/pakistan-suspends-

import-of-cotton-agri-commodities-from-india/articleshow/55643459.cms

Dawn (2016). Pakistan Puts 'Unofficial Hold' on Cotton Imports from India as Tensions

Simmer. Available at https://www.dawn.com/news/1299627

Department of Revenue, Ministry of Commerce, Government of India. Notification

No.11/2018-Customs dated February 2, 2018. Available

at http://www.cbic.gov.in/resources//htdocs-cbec/customs/cs-act/notifications/ notfns-

2018/cs-tarr2018/cs11-2018.pdf;jsessionid=8351833DBF8EFB4BBFCBD6

A82B518B89

Department of Revenue, Ministry of Commerce, Government of India. Notification

No.68/2012-Customs dated December 31, 2012. Available

at http://www.cbic.gov.in/htdocs-cbec/customs/cs-act/notifications/notfns-2012/cs-

tarr2012/cs68-2012

Revenue Division, Ministry Of Finance, Economic Affairs, Revenue and Statistics,

Government of Pakistan. S.R.O. 1055(I)/2015 dated October 30, 2015. Available

at http://download1.fbr.gov.pk/SROs/20151030151019315612015SRO1055.pdf

Ministry of Commerce, Government of Pakistan. S.R.O. 766 (I)/2009 dated September 4,

2009. Available at http://www.apgmja.org/documents/import_2009-trade-policy.pdf

Express Tribune (2016). Pakistan Suspends Cotton Imports from India. Available at

https://tribune.com.pk/story/1243541/unannounced-cotton-imports-india-suspended/

Press Information Bureau (2018). Social Welfare Surcharge, On Imported Goods, To

Provide For Social Welfare Schemes Of The Government. Ministry of Finance.

Reuters (2016). Pakistan Puts Cotton Imports from India on Hold as Tensions Mount.

Available at https://in.reuters.com/article/india-pakistan-cotton-idINKBN13P14E

Taneja, N., Dayal, I. and Bimal, S. (2016). Facilitating India-Pakistan Trade through the

Land Route. Working Paper 318, ICRIER, New Delhi.

Taneja, N. & Bimal, S. (2016). India’s Informal Trade with Pakistan. Working Paper 327,

ICRIER, New Delhi.

https://economictimes.indiatimes.com/news/defence/pakistan-suspends-import-of-cotton-agri-commodities-from-india/articleshow/55643459.cms

https://economictimes.indiatimes.com/news/defence/pakistan-suspends-import-of-cotton-agri-commodities-from-india/articleshow/55643459.cms

https://www.dawn.com/news/1299627

http://www.cbic.gov.in/resources/htdocs-cbec/customs/cs-act/notifications/%20notfns-2018/cs-tarr2018/cs11-2018.pdf;jsessionid=8351833DBF8EFB4BBFCBD6%20A82B518B89



http://www.cbic.gov.in/htdocs-cbec/customs/cs-act/notifications/notfns-2012/cs-tarr2012/cs68-2012

http://www.cbic.gov.in/htdocs-cbec/customs/cs-act/notifications/notfns-2012/cs-tarr2012/cs68-2012

http://download1.fbr.gov.pk/SROs/20151030151019315612015SRO1055.pdf

http://www.apgmja.org/documents/import_2009-trade-policy.pdf

https://tribune.com.pk/story/1243541/unannounced-cotton-imports-india-suspended/

https://in.reuters.com/article/india-pakistan-cotton-idINKBN13P14E

21

Taneja, N., Mehra, M., Mukherjee, P., Bimal, S., Dayal, I. (2013). Normalizing India

Pakistan Trade. Working Paper No. 267, ICRIER, New Delhi

WTO (2014). Trade Facilitation Agreement. WT/L/931

WTO (2015). Trade Policy Review, Pakistan. Report by the Secretariat, Pakistan.

22

APPENDIX

Appendix A

Table 1: India’s Top 10 Exports to Pakistan at HS-6 (2016-17)

HS Code Commodity Description Exports

(US$ million)

Share of the Product

in Exports (%)

520100 Cotton, not carded or combed 251.51 13.81

290243 Para-xylene 88.35 4.85

390210 Polypropylene 77.54 4.26

520524 Single yarn of combined fibers

measuring<192.31 but >=125 dctx(>52 but

<=80 mtrc no)

63.4 3.48

70200 Tomatoes fresh or chilled 55.01 3.02

520527 Single yarn of combined fibers measuring

between 83.33 and 106.38 dctx and 94 to

120 mtrc no.

49.21 2.70

170199 Sugar refined not containing

flavoring/coloring matter

42.37 2.33

320416 Reactive dyes and preparations based

thereon

36.91 2.03

520513 Single yarn of uncombined fibers

measuring<232.56 but >=192.31 dctx(>43

but <=52 mtrc no)

34.64 1.90

520528 Single yarn of combined fibers measuring

<83.83 dctx and > 120 mtrc no.

29.16 1.60

Total 728.1 39.98


India

Table 2: India’s Top 10 Imports from Pakistan at HS-6 (2016-17)

HS Code Commodity Description Imports (US$

million)

Share of the Product in

Imports (%)

80410 Dates fresh or dried 126.49 27.86

252329 Other port land cement 83.45 18.38

271012 Light oils and preparations 67.96 14.97

260600 Aluminum ores and concentrates 16.56 3.65

252010 Gypsum; anhydrite 16.39 3.61

520100 Cotton, not carded or combed 12.39 2.73

271019 Other petroleum oils and oils obtained

from bituminous minerals etc

10.59 2.33

283620 Disodium carbonate 10.07 2.22

410799 Other/hides/skins including sides 9.56 2.11

631090 Other rags,scrap twne,cordge,rope etc 7.54 1.66

Total 361.00 79.52


India

23

Appendix B

Top Commodities Exported from India to Pakistan

Top 5 commodities exported from India to Pakistan by Road (2016-17)

HS Code Commodity Description Value (US$ million)

07020000 Tomatoes fresh or chilled 54.76

52052410 Grey2401 30.23

52010015 Indian cotton of staple length 28.5mm (1.4/32") and above 13.99

52052790 Other 13.41

52051310 Grey 11.27

Source: DGCIS, Ministry of Commerce and Industry, Govt. of India

Top 5 commodities exported from India to Pakistan by Rail (2016-17)


12119032 Psyllium husk (isobgul husk) 9.10

09083110 Large ( amomum) 7.08

12024210 Kernels, h.p.s 6.30

32041610 Reactive yellows 5.62

12099190 Vegetable seeds for planting n.e.s. 5.53


Top 5 commodities exported from India to Pakistan by Sea (2016-17)


52010015 Indian cotton of staple length 28.5mm (1.4/32") and above 231.11

29024300 Para-xylene 88.47

39021000 Polypropylene 65.82

17019990 Other refined sugar including centrifugal sugar 42.58

52052790 Other 34.21


Top Commodities Imported by India from Pakistan

Top 5 commodities imported by India from Pakistan by Road (2016-17)


08041030 Dry dates hard (chhohara or kharek) 112.2488

25232910 Ordinary portland cement, dry 56.58157

26060090 Other aluminum ores and concentrates 16.61556

25201010 Natural gypsum and anhydrite 16.25269

28362020 Disodium carbonate light 8.066337


24

Top 5 commodities imported by India from Pakistan by Rail (2016-17)


41071900 Other whole hids/skins 2.52

90189023 Srgcl frcps,frcp clmps,clips,ndle holders,introducers,cephal 1.51

90189022 Surgical knives, scissors and blade 1.49

90184900 Other instruments and aplncs, used in dental science 1.09

41079900 Other/hides/skins including sides 0.68


Top 5 commodities imported by India from Pakistan by Sea (2016-17)


27101290 Other 68.02

25232910 Ordinary portland cement, dry 27.06

8041030 Dry dates hard (chhohara or kharek) 13.70

52010020 Foreign cotton of all staple lengths 12.39

27101990 Other petroleum oils and oils obtained from bituminous min 8.21


25

Appendix C

HS Code Product Description

520511 Cotton yarn; (not sewing thread), single, of uncombed fibres, 85% or more by weight of

cotton, measuring 714.29 decitex or more, (not exceeding 14 metric number), not for

retail sale


cotton, less than 714.29 but not less than 232.56 decitex (exceeding 14 but not exceeding

43 metric number), not for retail sale





cotton, less than 192.31 but not less than 125 decitex (exceeding 52 but not exceeding 80

metric number), not for retail sale


cotton, measuring less than 125 decitex (exceeding 80 metric number), not for retail sale

520521 Cotton yarn; (not sewing thread), single, of combed fibres, 85% or more by weight of


retail sale











cotton, less than 125 but not less than 106.38 decitex (over 80 but not over 94 metric

number), not for retail sale


cotton, less than 106.38 but not less than 83.33 decitex (over 94 but not over 120 metric

number), not for retail sale


cotton, measuring less than 83.33 decitex (exceeding 120 metric number), not for retail

sale

520531 Cotton yarn; (not sewing thread), multiple or cabled, of uncombed fibres, 85% or more

by weight of cotton, 714.29 decitex or more (not exceeding 14 metric number) per single

yarn, not for retail sale


by weight of cotton, 714.28 to 232.56 decitex (15 to 43 metric number) per single yarn,

not for retail sale



not for retail sale


by weight of cotton, 192.30 to 125 decitex (53 to 80 metric number) per single yarn, not

for retail sale


by weight of cotton, less than 125 decitex (exceeding 80 metric number), per single


26

520541 Cotton yarn; (not sewing thread), multiple or cabled, of combed fibres, 85% or more by

weight of cotton, 714.29 decitex or more (not exceeding 14 metric number) per single



weight of cotton, 714.28 to 232.56 decitex (15 to 43 metric number) per single yarn, not

for retail sale



for retail sale


weight of cotton, 192.30 to 125 decitex (53 to 80 metric number) per single yarn, not for

retail sale


weight of cotton, 124 to 106.38 decitex (81 to 94 metric number) per single yarn, not for

retail sale



for retail sale


weight of cotton, less than 83.33 decitex (exceeding 120 metric number) per single yarn,

not for retail sale

520611 Cotton yarn; (not sewing thread), single, of uncombed fibres, less than 85% by weight of

cotton, measuring 714.29 decitex or more (not exceeding 14 metric number), not for

retail sale












520621 Cotton yarn; (not sewing thread), single, of combed fibres, less than 85% by weight of


retail sale












520631 Cotton yarn; (not sewing thread), multiple or cabled, of uncombed fibres, less than 85%

by weight of cotton, 714.29 decitex or more (not exceeding 14 metric number) per single




27

not for retail sale



not for retail sale


by weight of cotton, 192.30 to 125 decitex (53 to 80 metric number) per single yarn, not

for retail sale


by weight of cotton, less than 125 decitex (exceeding 80 metric number) per single yarn,

not for retail sale

520641 Cotton yarn; (not sewing thread), multiple or cabled, of combed fibres, less than 85% by

weight of cotton, 714.29 decitex or more (not exceeding 14 metric number) per single




for retail sale



for retail sale


weight of cotton, 192.30 to 125 decitex (53 to 80 metric number) per single yarn, not for

retail sale


weight of cotton, less than 125 decitex (exceeding 80 metric number) per single yarn,

not for retail sale

520710 Cotton yarn; (not sewing thread), containing 85% or more by weight of cotton, put up

for retail sale

520790 Cotton yarn; (not sewing thread), containing less than 85% by weight of cotton, put up

for retail sale

520811 Fabrics, woven; containing 85% or more by weight of cotton, unbleached, plain weave,

weighing not more than 100g/m2


weighing more than 100g/m2 but not more than 200g/m2

520813 Fabrics, woven; containing 85% or more by weight of cotton, unbleached, 3-thread or 4-

thread twill, including cross twill, weighing not more than 200g/m2

520819 Fabrics, woven; containing 85% or more by weight of cotton, unbleached, of weaves

n.e.c. in item no. 5208.1, weighing not more than 200g/m2

520821 Fabrics, woven; containing 85% or more by weight of cotton, bleached, plain weave,




520823 Fabrics, woven; containing 85% or more by weight of cotton, bleached, 3-thread or 4-

thread twill, including cross twill, weighing not more than 200g/m2

520829 Fabrics, woven; containing 85% or more by weight of cotton, bleached, of weaves n.e.c.

in item no. 5208.2, weighing not more than 200g/m2

520831 Fabrics, woven; containing 85% or more by weight of cotton, dyed, plain weave,




520833 Fabrics, woven; containing 85% or more by weight of cotton, dyed, 3-thread or 4-thread

twill, including cross twill, weighing not more than 200g/m2

520839 Fabrics, woven; containing 85% or more by weight of cotton, dyed, of weaves n.e.c. in

item no. 5208.3 weighing not more than 200g/m2

28

520841 Fabrics, woven; containing 85% or more by weight of cotton, of yarns of different

colours, plain weave, weighing not more than 100g/m2


colours, weighing more than 100g/m2 but not more than 200g/m2


colours, 3-thread or 4-thread twill, including cross twill, weighing not more than

200g/m2


colours, of weaves n.e.c. in item no. 5208.4, weighing not more than 200g/m2

520851 Fabrics, woven; containing 85% or more by weight of cotton, printed, plain weave,




520859 Fabrics, woven; containing 85% or more by weight of cotton, printed, of weaves n.e.c.

in item no. 5208.5, weighing not more than 200g/m2


weighing more than 200g/m2

520912 Fabrics, woven; containing 85% or more by weight of cotton, unbleached, 3-thread or 4-

thread twill, including cross twill, weighing more than 200g/m2

520919 Fabrics, woven; containing 85% or more by weight of cotton, unbleached, of weaves

n.e.c. in item no. 5209.1, weighing more than 200g/m2



520922 Fabrics, woven; containing 85% or more by weight of cotton, bleached, 3-thread or 4-


520929 Fabrics, woven; containing 85% or more by weight of cotton, bleached, of weaves n.e.c.

in item no. 5209.2, weighing more than 200g/m2



520932 Fabrics, woven; containing 85% or more by weight of cotton, dyed, 3-thread or 4-thread

twill, including cross twill, weighing more than 200g/m2

520939 Fabrics, woven; containing 85% or more by weight of cotton, dyed, of weaves n.e.c. in

item no. 5209.3, weighing more than 200g/m2


colours, plain weave, weighing more than 200g/m2


colours, weighing more than 200g/m2, denim


colours, 3-thread or 4-thread twill, including cross twill, weighing more than 200g/m2


colours, of weaves n.e.c. in item no. 5209.4, weighing more than 200g/m2



520952 Fabrics, woven; containing 85% or more by weight of cotton, printed, 3-thread or 4-


520959 Fabrics, woven; containing 85% or more by weight of cotton, printed, of weaves n.e.c.

in item no. 5209.5, weighing more than 200g/m2

521011 Fabrics, woven; containing less than 85% by weight of cotton, mixed mainly or solely

with man-made fibres, unbleached, plain weave, weighing 200g/m2 or less


with man-made fibres, unbleached, of weaves n.e.c. in item no. 5210.1, weighing

200g/m2 or less


with man-made fibres, bleached, plain weave, weighing 200g/m2 or less

29


with man-made fibres, weighing 200g/m2 or less, bleached, of weaves n.e.c. in item no.

5210.2


with man-made fibres, weighing 200g/m2 or less, dyed, plain weave


with man-made fibres, weighing 200g/m2 or less, dyed, 3-thread or 4-thread twill,

including cross twill


with man-made fibres, weighing 200g/m2 or less, dyed, of weaves n.e.c. in item no.

5210.3


with man-made fibres, weighing 200g/m2 or less, of yarns of different colours, plain

weave


with man-made fibres, weighing 200g/m2 or less, of yarns of different colours, of

weaves n.e.c. in item no. 5210.4


with man-made fibres, weighing 200g/m2 or less, printed, plain weave


with man-made fibres, weighing 200g/m2 or less, printed, of weaves n.e.c. in item no.

5210.5


with man-made fibres, unbleached, plain weave, weighing more than 200g/m2


with man-made fibres, unbleached, 3- or 4-thread twill, including cross twill, weighing

more than 200g/m2


with man-made fibres, unbleached, of weaves n.e.c. in item no. 5211.1, weighing more

than 200g/m2


with man-made fibres, weighing more than 200g/m2, bleached


with man-made fibres, weighing more than 200g/m2, dyed, plain weave


with man-made fibres, weighing more than 200g/m2, dyed, 3-thread or 4-thread twill,



with man-made fibres, weighing more than 200g/m2, dyed, of weaves n.e.c. in item no.

5211.3


with man-made fibres, weighing more than 200g/m2, of yarns of different colours, plain

weave


with man-made fibres, weighing more than 200g/m2, of yarns of different colours,

denim


with man-made fibres, weighing more than 200g/m2, of yarns of different colours, 3-

thread or 4-thread twill, including cross twill


with man-made fibres, weighing more than 200g/m2, of yarns of different colours, of

weaves n.e.c. in item no. 5211.4


with man-made fibres, weighing more than 200g/m2, printed, plain weave

30


with man-made fibres, weighing more than 200g/m2, printed, 3-thread or 4-thread twill,



with man-made fibres, weighing more than 200g/m2, printed, of weaves n.e.c. in item

no. 5211.5

521211 Fabrics, woven; of cotton, unbleached, weighing not more than 200g/m2, n.e.c. in

chapter 52

521212 Fabrics, woven; of cotton, bleached, weighing not more than 200g/m2, n.e.c. in chapter

52

521213 Fabrics, woven; of cotton, dyed, weighing not more than 200g/m2, n.e.c. in chapter 52

521214 Fabrics, woven; of cotton, of yarns of different colours, weighing not more than

200g/m2, n.e.c. in chapter 52

521215 Fabrics, woven; of cotton, printed, weighing not more than 200g/m2, n.e.c. in chapter 52

521221 Fabrics, woven; of cotton, unbleached, weighing more than 200g/m2, n.e.c. in chapter

52

521222 Fabrics, woven; of cotton, bleached, weighing more than 200g/m2, n.e.c. in chapter 52

521223 Fabrics, woven; of cotton, dyed, weighing more than 200g/m2, n.e.c. in chapter 52

521224 Fabrics, woven; of cotton, of yarns of different colours, weighing more than 200g/m2,

n.e.c. in chapter 52

521225 Fabrics, woven; of cotton, printed, weighing more than 200g/m2, n.e.c. in chapter 52

31

LATEST ICRIER’S WORKING PAPERS

NO. TITLE AUTHOR YEAR

362 HIGH-SKILLED LABOUR

MOBILITY IN AN ERA OF

PROTECTIONISM: FOREIGN

STARTUPS AND INDIA

ARPITA MUKHERJEE

AVANTIKA KAPOOR

ANGANA PARASHAR SARMA

JULY 2018

361 LAND USE AND LAND

ACQUISITION LAWS IN INDIA

ANWARUL HODA JULY 2018

360 UPGRADING IN THE INDIAN

AUTOMOBILE SECTOR: THE

ROLE OF LEAD FIRMS

SAON RAY

SMITA MIGLANI

JUNE 2018

359 THE ROLE OF WATERWAYS IN

PROMOTING URBAN

RESILIENCE: THE CASE OF

KOCHI CITY

ZEBA AZIZ

INDRO RAY

SANDEEP PAUL

MAY 2018

358 TOWARDS SUSTAINABLE,

PRODUCTIVE AND

PROFITABLE AGRICULTURE:

CASE OF RICE AND

SUGARCANE

ASHOK GULATI

GAYATHRI MOHAN

APRIL 2018

357 SUPPORTING INDIAN

FARMERS: PRICE SUPPORT OR

DIRECT INCOME/INVESTMENT

SUPPORT?

ASHOK GULATI

TIRTHA CHATTERJEE

SIRAJ HUSSAIN

APRIL 2018

356 SOLID WASTE MANAGEMENT

IN INDIA AN ASSESSMENT OF

RESOURCE RECOVERY AND

ENVIRONMENTAL IMPACT

ISHER JUDGE AHLUWALIA

UTKARSH PATEL

APRIL 2018

355 CHANGING TASK CONTENTS

OF JOBS IN INDIA:

IMPLICATIONS AND WAY

FORWARD

PANKAJ VASHISHT

JAY DEV DUBEY

MARCH 2018

354 TRADE RULES IN E-

COMMERCE: WTO AND INDIA

ARPITA MUKHERJEE

AVANTIKA KAPOOR

MARCH 2018

353 SCALING UP ROOFTOP SOLAR

POWER IN INDIA: THE

POTENTIAL OF MUNICIPAL

SOLAR BONDS

SAURABH TRIVEDI

INDRO RAY

GREGOR VULTURIUS

AMRITA GOLDAR

LABANYA PRAKASH J

SANDEEP PAUL

AARSI SAGAR

MARCH 2018

352 CROP INSURANCE IN INDIA:

KEY ISSUES AND WAY

FORWARD

ASHOK GULATI

PRERNA TERWAY

SIRAJ HUSSAIN

FEBRUARY 2018

32

About ICRIER

Established in August 1981, ICRIER is an autonomous, policy-oriented, not-for-profit,

economic policy think tank. ICRIER’s main focus is to enhance the knowledge content of

policy making by undertaking analytical research that is targeted at informing India’s policy

makers and also at improving the interface with the global economy.

ICRIER’s office is located in the institutional complex of India Habitat Centre, New Delhi.

ICRIER’s Board of Governors include leading academicians, policymakers, and

representatives from the private sector. Dr. Isher Ahluwalia is ICRIER’s chairperson.

Dr. Rajat Kathuria is Director and Chief Executive.

ICRIER conducts thematic research in the following eight thrust areas:

Macroeconomic Management Financial Liberalisation and Regulation

Global Competitiveness of the Indian Economy – Agriculture, Manufacturing and

Services

Multilateral Trade Negotiations and FTAs

Challenges and Opportunities of Urbanization

Climate Change and Sustainable Development

Physical and Social Infrastructure including Telecom, Transport Energy and Health

Asian Economic Integration with focus on South Asia

Skill Development, Entrepreneurship and Jobs

To effectively disseminate research findings, ICRIER organises workshops, seminars and

conferences to bring together academicians, policymakers, representatives from industry and

media to create a more informed understanding on issues of major policy interest. ICRIER

routinely invites distinguished scholars and policymakers from around the world to deliver

public lectures and give seminars on economic themes of interest to contemporary India.

working paper 363 emerging trends in india-pakistan trade · table 7: comparison between informal...

Documents